2019 was touted as the year for rebuilding the public trust in finance, recruiting new talent—who can adapt their skills and roles in the face of digital integration—and to focus on the ethical implications of artificial intelligence (AI) innovations.
We have seen a number of high-profile scandals centred on the audit and accountancy industries; the ramifications for which have gone far beyond the sector itself.
These activities paint a picture that investors may not care about company reports as long as they can turn a quick buck; although of course they should care.
Meanwhile, consumers are becoming much more aware of the risks associated with inaccurate reporting and bad audit practices.
Often, they are the ones who end up ‘on the hook’ when failings within the finance and accounting sector impact savings, pension funds and other company investments they depend on.
The accounting and auditing industries need to continue working to rebuild trust, not only with investors or shareholders, but with a broad range of stakeholders who are more exposed than ever to the potential pitfalls of inaccurate reporting.
Organisations are increasingly looking to the finance department not just as a back-office operation, but rather as a function that provides value added services to any business.
CFOs are looking for financial insights from their data, but manual processes are still seen as the biggest bottleneck in financial close and accounting operations; when teams are buried in spreadsheets and tightly bound to manually intensive reporting processes, there is little time for value-add activities like forecasting, data analytics, and business advice.
The automation of manual processes will undoubtedly be the biggest trend for financial organisations as we move into the second half of 2019 and 2020.
Automation streamlines the most routine, manual work, and opens the door to continuous accounting – a process that we believe is transforming the way accounting and finance teams work.
This is achieved by embedding automation, control, and period-end tasks within daily activities.
This gives accountants the visibility they need to provide reporting at any time during the month, and help drive more informed decisions for the organisation.
Another noteworthy technology is robotic process automation (RPA), which automates manual tasks, manages workflow, and standardises the close process across complex organisations and IT landscapes.
RPA is in fact going to enable accountants to finally do what they’re meant to be doing: performing analysis, advising the business, and providing impactful financial data to shape their organisations’ future.
The ubiquity of technology is changing the way businesses operate, but closing the gap between a specific sector and the contemporary technology industry can be challenging.
Digital transformation will continue to top the agenda for most Asia-Pacific organisations in 2019, although it must be said that attracting and retaining the right talent – with sector-specific expertise as well as the necessary technical and soft skills - will be critical to this process.
When meaningful accounting activities occur every day, accountants and decision makers always have access to real-time data.
This immediate insight, instead of months-old data, enables leadership to pivot quickly to meet customer and stakeholder demands and seize new opportunities before the competition.
Thus, it is widely accepted that automation, AI and machine learning have the potential to transform the role of the accountant, freeing up time and talent which can be better used for financial forecasting and business analysis.
However, as the industry strives to become more IT-centric, we should not overlook the down-stream implications of these innovations.
Today, AI has become a catch-all buzzword encompassing a number of different technologies. But consider for a moment what a truly intelligent, automated system could look like in a finance setting.
What if one day we develop algorithmic processes capable of making independent business decisions using real-time financial data?
If that algorithm makes an error, who is at fault? Is it the algorithm, the person who fed the algorithm data sets – the person who designed the software? Or should the CFO ultimately be held accountable?
Clearly these questions will still be hypotheticals for many organisations. Nonetheless, they highlight the potential risk new technology could introduce to a naturally risk-averse sector.
As we approach the end of 2019, we need to think seriously about the rules, legislation and regulation our industry will need to survive such innovation.
About the Author
Terry Smagh is senior vice president, Asia Pacific & Japan, at BlackLine, an accounting automation software provider.